INTERVIEW: There is huge potential for growth in the insurance industry – Ugochukwu

Mr. Godson Ugochukwu, is the new chairman of Guinea Insurance Plc. In this interview with Ebere Nwoji, he spoke on the efforts of the new directors of the company to reposition it, as well as his strategic plan to propel the company to profitability, despite the economic headwinds. Excerpts:

You were recently appointed the new chairman of the board of the 69 year old Guinea Insurance plc, what are your plans and projections on how to move the company forward between now and the next five years?

As you probably know, the new board came on board on March 23, 2016 and by March 23 of this year, we will be one year. Circumstance forced Guinea Insurance Plc to rejig its organogram and to inject new blood into the core visionary department of the company which is the board of the company. So, in the course of this one year, what we did when we came on board is to reposition the company for effectiveness and meeting the yearnings of its shareholders.

By the grace of God, the board is made up of very accomplished individuals who are professionals. We have qualified Chartered Accounts, Lawyers and Economists; we have people who have distinguished themselves in diverse areas of life. We have Ex-Minister on the board; we have captains of industry on the board and the board spans across ethnic divides of the country basically reflecting Guinea insurance’s reach across the country. It is a board I will say that I, for one am privileged to head as chairman.

How will you assess the business environment for Guinea Insurance since your appointment as Board Chairman and the measures the board bringing to bear in order to change the tide and ensure that the company gains sizable share of the market especially in the face of the current financial crisis in the country?

Whatever I say to you here, I say on behalf of the board and I say with full confidence that they are persons who will also concur and confirm whatever I say to you. This board was constituted on the 24th March 2016 and our first call on duty was to generally appraise the state of the company and this is what we were convinced needed to be done for us to define the nature of our launching path towards the repositioning of the company within the insurance industry in Nigeria.

If you know the history of Guinea Insurance Plc, you know that by December this year, Guinea will be 59 years old. If you talk about its origin, it will be about 69 years. For such a company that has been established in this country and has such a long life-span, doing business in Nigeria, knowing the terrain and establishing itself, spreading its tentacles to reach the fabrics of the economy of this country, you will understand that it is no small task so what we did is this, we took the measure of what needed to be done and having understood what needed to be done, because the truth of the matter is that a lot needed to be done. Guinea was losing a bit of market share, things were not exactly rosy, but it was not terribly bad. If you are a business minded person, you will always know where you want your company to be but Guinea was not where a good business minded person would have loved it to be.

On how Guinea Insurance is managing to wade through the hard times, well,  the recession we are going through now in the country is not something unknown worldwide. We all know about the housing crisis in the US in 2008. What you do generally today is to study how people, companies and entities that survived and are doing well did theirs and then you learn from them. You also actually look at those who did not survive and you learn from their mistakes. For Guinea Insurance, what actually helped us is our antiquity. We have been around for long.

We have seen recession many times and we have history to fall back. What we have done is first and foremost, we extrapolated what an individual that wants to survive would do which is  not to key into the panic of the situation. So we out in place  board of directors and  management team that very well understand that the success of anything in life whether a company or a person starts from the mind, your mental attitude to a problem that is on ground and if that problem is universal and is not peculiar  to you, then it is easier for you to make a choice on what decision you want to take.

Generally speaking, most companies give unnecessary excuses because of recession and the more you talk about it the more it affects you, not necessarily because you talked about it but because it begins to work on your psyche. That is why we were able to increase salaries in a recession while others are cutting salaries why? because we don’t want it to affect our staff. We want Guinea to have a post-recession view and for us to be able to have a post-recession view, to sell and for people to catch the vision and to run with it and to bring it to pass, we want to be sure that our staff, the resources we have are most importantly of good quality standard. Now in Nigeria, across board, companies are sacking staff those that are not sacking are calling a meeting with their staff and giving them options: if you are on N1m, we can’t afford, we are giving you N500,000, take it or leave it!

We didn’t want our staff to be focusing on survival on a recession because if they focus only on survival, they can barely survive. it’s just like a football team playing defence may be because you have scored one goal and instead of attacking, you fallback to defence. All the pressure from your opponent will be on you and if there is any mistake, then the consequence may be disastrous.

For us in Guinea Insurance, we have positioned ourselves to go with the current tide of structural and operational changes in the insurance industry. There has been a renewed focus on corporate governance and the board has spent a significant proportion of its time examining and strengthening the operational processes throughout the company. Having a solid corporate governance framework is the key to rebuilding trust and transparency with all stakeholders.

Contrary to fears that the decline in national revenue occasioned by the fall in oil price and depreciation in the naira value, would spell hardship for insurance industry as expressed recently by insurance practitioners, I am of the believe that the insurance sector has the potential to grow volumes and enhance shareholders’ value but it requires insurance companies to device means of taking advantage of growth opportunities around them because doing so, would not only increase its penetration but also, enhance awareness and the sector’s contribution to GDP.”

As a company destined for greatness and propelled by a Board of Directors and Management team with insatiable thirst for success, we keep the faith that there are no limits, there are only plateaus. We have therefore, taken steps to ensure that our greatest asset – our people, are enhanced through human capital investment. I am pleased to say, that in such a short while, we are beginning to experience growth in our business. I therefore, make bold to say that the future is indeed very promising.”

We are only wishing that government would provide the necessary regulatory mechanisms, conducive business environments and ensure full enforcement of compulsory insurances in Nigeria as it would not only drive the growth of the sector but also, contribute significantly to the growth of the country. But there is lack of political will to enforce certain laws and policies and these have constituted serious headwinds that have slowed down the growth of the industry. Insurance underwriting in Nigeria was an extremely worthwhile venture but, it requires government’s intervention especially at this time when the current economic crisis occasioned by high inflation and low disposable income, have significantly impacted on the performance of insurance practitioners.  When economies experience downturn, the first casualty is insurance. We have seen a lot of reduction in interest for insurance as lot of people who naturally would buy insurance, would regard it as a secondary issue due to the fact that insurance business thrives on the back of the economy.

One of the problems of Guinea insurance in recent past has been high turn over of key staff, how have you strategised to stop this?

I agree with you that one of the problems we had before was a high turnover of staff at the topmost level, we realised that it wasn’t something that augur well for any brand and continuity of policy so we needed to put a stop to that and we weren’t in a hurry to run into the market and grab another person and put there as Managing Director after the resignation of the former MD. We looked inwards and surprisingly we found somebody who is capable. If you ask the board on her performance during this one year, the board is quite satisfied with her performance. I mean the acting Managing Director who was actually the Company’s Secretary and Head of Legal Department.

But the surprising thing is that, she didn’t just bury herself in the course of working in the company in the law books, she was involved in every department and every aspect of the company’s activities so when we spoke with her, she knew virtually every problem of the company, she knew the strength of the company and she knew what needed to be done and we say look, we are going to take a position that would occupy the intersection between getting somebody and paying at a premium for that person with the higher risk of higher turnover and getting somebody who understands the problem we are trying to solve and we were able to balance it and it has worked for us.

Suffice to say that the facts are clear, there was a high turnover of management staff, it has ended and I’m grateful that you are the print media and I want you and the shareholders of this company to hold this board to this commitment. That musical chair has ended.

Looking at the insurance sector in Nigeria, you will see that the general public is not too eager to buy insurance, what unspecific terms do you think should be done to change the trend?

Until you experience an insurable risk, you will never understand the benefit of insurance and I tell you one example. By the time you drive back to your office, depending on the area your office is and how busy the road is, you will probably see two individuals quarrelling on the road, their cars steaming in the middle of the road –that means there has  been a brush. Do you know one funny thing, what will solve the problem alone, not the problem of having the accident but the problem of having come down to make a spectacle of yourself in the middle of the road is insurance. I never knew this until I insured my car.

Before, the only thing that restrained me from the road rage was my calling as a lawyer. That it will be below my dignity as a lawyer to start demonstrating in the middle of the road and that is why in the western world,, it looks like they are better behaved, they are nicer than us, No. It’s because a lot of things are insured. Why do you want to take a black eye over something someone else will pay you for? It happened to my sister-in-law, just down there at Ikoyi there, the two cars were insured – hers and the other person, the person just came down and said, am sorry, this is my insurance details, they are happy because insurance company as far as am concerned have been taking money.

Now back to your question on what to do to make Nigerians think and buy insurance, if you have been going back and front saying I can survive it, without thinking insurance, it’s a problem and that is our mentality. So, it takes a lot for people to think insurance, people tend to give us money they consider its extra funds for those who even bothered. It is only when they buy a new car they insure thereafter they say I pay them for many years now and I never made a claim. If you make it compulsory because the only thing that is compulsory now is the Third Party motor Insurance.

The moment you make it compulsory, it’s not only the insurance that will benefit, yes, the sector will benefit, but the country generally will benefit more because the problem we have is because we don’t think in terms of man hour loss that is why we spend so much hours on traffic. Insurance is something that flies under the redder but its impact on the global economy for this country will be huge if we could make it compulsory and enforce appropriately certain aspect of insurance; so it’s a shot in the right direction but I just pray and hope that they can implement it.

For us in Guinea Insurance, we have positioned ourselves to go with the current tide of structural and operational changes in the insurance industry. There has been a renewed focus on corporate governance and the board has spent a significant proportion of its time examining and strengthening the operational processes throughout the company. Having a solid corporate governance framework is the key to rebuilding trust and transparency with all stakeholders.

Contrary to fears that the decline in national revenue occasioned by the fall in oil price and depreciation in the naira value, would spell hardship for insurance industry as expressed recently by insurance practitioners, I’m of the believe that the insurance sector has the potential to grow volumes and enhance shareholders’ value but it requires insurance companies to device means of taking advantage of growth opportunities around them because doing so, would not only increase its penetration but also, enhance awareness and the sector’s contribution to GDP.”

As a company destined for greatness and propelled by a Board of Directors and Management team with insatiable thirst for success, we keep the faith that there are no limits, there are only plateaus. We have therefore, taken steps to ensure that our greatest asset – our people, are enhanced through human capital investment. I am pleased to say, that in such a short while, we are beginning to experience growth in our business. I therefore, make bold to say that the future is indeed very promising.”

We are only wishing that government would provide the necessary regulatory mechanisms, conducive business environments and ensure full enforcement of compulsory insurances in Nigeria as it would not only drive the growth of the sector but also, contribute significantly to the growth of the country. But there is lack of political will  to enforce certain laws and policies and these have constituted  serious headwinds that have slowed down the growth of the industry.

 

Source: Thisday